Lottery veto, while 'not surprising,' angers transparency advocates

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May 7, 2013 at 1:38 PM

Gov. Chris Christie's veto of a bill Monday requiring contracts involving lottery privatization be approved by legislators was quickly denounced by the bill's supporters, who called the action a setback for government transparency.

The bill would have mandated Assembly and Senate approval for any contract between the state and a private entity that provides for the operation of the state lottery. Legislation passed both houses earlier this year, mostly along party lines.

The veto comes after the New Jersey Department of Treasury last month agreed to hand reins of the New Jersey Lottery's sales and marketing operations over to Northstar New Jersey Lottery Group — the only firm that bid on the contract — for 15 years.

Assemblyman Vincent Prieto (D-Secaucus) a sponsor of the bill requiring legislative approval of any such contract, said the deal to Northstar attempts to fix a lottery system that is not broken.

Prieto was also concerned that having an outside firm market the lottery could steer business to big-box chain stores in effort to sell tickets to more buyers, hurting the smaller convenience stores that rely on lottery sales as a draw.

"It's unfortunate but not surprising, because it was a done deal from a get-go," Prieto said of the veto. "You have a lottery that's bringing in a net of $1 billion to our coffers. It was working well. It was award winning. I don't see why we wouldn't keep that in house."

Christie said in a veto message that opponents have mischaracterized the plan.

"Simply put, the department's plan is intended to modernize and maximize the potential of the lottery, and any such contract would be strictly limited to the provision of marketing and sales services," Christie said. "The department would not, at the end of an open transparent, public procurement process, 'privatize' the operation of state's lottery as the bill's sponsors suggest."

Northstar agreed to pay the state $120 million upon final award and execution of the contract, and has committed to generating at least $1.42 billion of total additional net income for the state over the life of the contract. That money would be in addition to what the lottery is expected to generate if operations remained unchanged.Northstar New Jersey Lottery Group is a joint venture of GTECH Corp., Scientific Games International and the Ontario Municipal Employees Retirement System.

Several Democratic members of New Jersey's Congressional delegation also denounced the veto. U.S. Rep. Frank Pallone called the governor's action "disturbing," while Rep. Donald Payne described it as "astonishing."

"Governor Christie's veto is absolutely astonishing and runs afoul of any sort of oversight or check-and-balance the people of New Jersey expect from their government," Payne said in a statement.